A stock that is issued without any designated minimum value (i.e., it bears no par or face value at the time of issuance). The value of no-par stocks is completely determined based on the market, not as per a guaranteed value (the par value) that is set at the issuance of the stocks. This is opposed to par value stocks where the corporate charter used to contain certain provisions setting a specific value that is the minimum which investors must pay for the stock.

Any extra amounts an issuer earned from selling the stock (par value stock) was credited to a capital account, while the amounts raised reflecting the par value were credited to a common stock account. If the stock is sold below the par value and the issuer later experiences financial problems leading to inability to pay or settle its financial obligations, its creditors can claim the difference between the purchase price and the par value to recover their outstanding debt from equity holders. In another scenario, the market price of the stock may drop below the par value, and the issuer may be liable to shareholders in the tune of the amount of such a drop.

No-par stocks help issuers circumvent these scenarios by issuing their stocks without setting a minimum price or par value at all. So, investors or holders would completely rely on the market as a key determinant of the value of their stock.